ACCOUNTING

PROBLEMS
 Problem 1:
 On April 01, 2016 Anees started business with Rs. 100,000
and other transactions for the month are:
 2. Purchase Furniture for Cash Rs. 7,000.
 8. Purchase Goods for Cash Rs. 2,000 and for Credit Rs.
1,000 from Khalid Retail Store.
 14. Sold Goods to Khan Brothers Rs. 12,000 and Cash
Sales Rs. 5,000.
 18. Owner withdrew of worth Rs. 2,000 for personal use.
 22. Paid Khalid Retail Store Rs. 500.
 26. Received Rs. 10,000 from Khan Brothers.
 30. Paid Salaries Expense Rs. 2,000
 Problem 2:
 Prepare general journal entries for the following transactions of a business
called Pose for Pics in 2016:
 Aug. 1: Hashim Khan, the owner, invested Rs. 57,500 cash and Rs. 32,500 of
photography equipment in the business.
 04: Paid Rs. 3,000 cash for an insurance policy covering the next 24
months.
 07: Services are performed and clients are billed for Rs. 10,000.
 13: Purchased office supplies for Rs. 1,400. Cash paid Rs. 400 and
remaining outstanding.
 20: Received Rs. 2,000 cash in photography fees earned previously.
 24: The client immediately pays Rs. 15,000 for services to be performed
at a later date.
 29: The business acquires photography equipment. The purchase
price is Rs. 100,000, pays Rs. 25,000 cash and signs a note for the balance.
 Problem 3:
 On March 2017, Farhan Rahim, starts wholesaling business.
Following transactions as follows:
 1. He started business with capital of Rs. 15,000 and Land worth Rs.
10,000.
 8. Bought goods from Bilal and Friends Rs. 1,000 and by cash from
XYZ Co. Rs 2,000.
 13. Sold goods to Rehman & sons Rs. 1,500 and sale by cash Rs.
5,000.
 17. Gave away charity of cash Rs. 50 and merchandising worth Rs.
30.
 21. Paid Bilal and Friends cash Rs. 975; discount received Rs. 25.
 28. Received cash from Rehman & Sons Rs. 1,450; allowed him
discount of Rs. 50.
 Problem 4:
 Shah Sauood Marine is a boat repair yard. During August 2016, its transactions
included the following:
 03. Loan taken from Habib Bank Ltd. of Rs. 25,000. Rs. 20,000 withdrawn for
business and remaining in the bank a/c.
 06. Paid rent for the month of August Rs. 4,400 and accrued rent expenses was Rs.
600.
 12. At request of Kiwi Insurance, Inc, made repairs on boat of Jon Seaways. Sent
bill for Rs. 5,620 for services rendered to Kiwi Insurance Inc. (credit Repair Service
Revenue).
 18. Made repairs to boat of Dennis Copper and collected in full the charge of Rs.
2,830.
 20. Placed Advertisement in The Dawn of Rs. 165, payment to be made within 30
days.
 25. Received a check for 5,620 from Kiwi Insurance Inc representing collection of
the receivable of August 12.
 30. Sent check to The Dawn in payment of the liability incurred on August 20.
 Problem 5:
 1st January, 2017, Saeed Ahmad started business other
transactions for the month of June as follows:
 02. Purchased from Kareem goods of list price of Rs. 6,000
subject to 10% trade discount by cash.
 04. Sold goods to Din Muhammad Rs. 800 and cash sales of Rs.
200.
 10. Distributed goods worth Rs. 200 as free samples and goods
taken away by the proprietor for personal use Rs. 100.
 12. Received discount Rs 20 and Commission Rs 500.
 17. Goods returned by Din Muhammad Rs. 200 and payment
other outstanding amount.
 24. Furniture lost by fire of worth Rs. 500.
 July 1. Owner invested PHp 500,000 cash along with computer equipment that
had a market value of php. 120,000 two years ago but was now worth Php.
100,000 only.
July 2. Paid php. 15,000 cash for the rent of office space for the month.
July 4. Purchased php. 12,000 of additional equipment on credit (due within 30
days).
July 8. Completed awork for a client and immediately collected the php. 32,000
cash.
July 10. Completed work for a client and sent a bill for php. 27,000 to be paid
within 30 days.
July 12. Purchased additional equipment for php. 8,000 in cash.
July 15. Paid an assistant php. 6,200 cash as wages for 15 days.
July 18. Collected php. 15,000 on the amount owed by the client.
July 25. Paid php. 12,000 cash to settle the liability on the equipment purchased.
July 28. Owner withdrew php. 500 cash for personal use.
July 30. Completed work for another client who paid only php. 40,000 for 50% of
the system design.
July 31. Paid salary of assistant php. 700.
July 31. Received PLDT bill, php. 1,800 and Meralco bill php. 3,800.
 Journal entries for the above transactions:
July 1 Dr Cash 500,000
Dr Computer Eqpt 100,000
Cr Capital 600,000
Owner started business with cash and computer Eqpt.
2 Dr Rent Exp 15,000
Cr Cash 15,000
Paid rent of office for the month of July.
4 Dr Equipment 12,000
Cr Creditors 12,000
Equipment purchased for business use.
8 Dr Cash 32,000
Cr Services rendered (income) 32,000
Services rendered for a client.
10 Dr Debtors 27,000
Cr Services rendered (income) 27,000
Services rendered for a client.
12 Dr Equipment 8,000
Cr Cash 8,000
Additional equipment purchased.
 15 Dr Salaries & Wages 6,200
Cr Cash 6,200
Paid wages to assistant for 15 days.
18 Dr Cash 15,000
Cr Debtors 15,000
Received cash from debtor.
25 Dr Creditors 12,000
Cr Cash 12,000
Creditors of Eqpt purchased, settled.
28 Dr Drawings 500
Cr Cash 500
Owner withdrew cash for personal use.
30 Dr Cash 40,000
Dr. Debtors 40,000
Cr Services rendered (income) 80,000
50% amount received by a client on a/o work completed.
31 Dr Salaries & Wages 700
Cr Cash 700
Paid salary to the assistant.
31 Dr Utilities Exp (PLDT) 1,800
Dr Utilities Exp (Meralco) 3,800
Cr Creditors 5,600
PLDT and Meralco have been assumed to be the utility companies.
 The company started business on June 6, 2013. The business was started with $300,000. The transactions
they engaged in during their first month of business are below:

 Date Transaction
 June 8 An amount of $50,000 was paid for six months of rent.
 June 9 Equipment costing $100,000 was purchased using $40,000 cash. The remaining amount of
$60,000 is a one year note with an interest rate of 3.4%
 June 10 Office supplies were purchased totaling $25,000 on account.
 June 16 Received $39,400 in cash for services rendered to customers.
 June 16 Paid the account for office supplies purchased June 10.
 June 20 $63,900 worth of services were given to customers. Received cash amount of $43,700.
Customers promised to pay remaining amount of $20,200.
 June 21 Paid employees’ wages for June 8-June 21. Wages totaled $23,500.
 June 21 Received $20,200 in cash for services rendered to customers on June 20.
 June 22 Received $6,300 in cash as advanced payment from customers.
 June 27 Office supplies were purchased totaling $3,500 on account.
 June 28 Electricity bill received totaling $1,850.
 June 28 Phone bill received totaling $2,650.
 June 28 Miscellaneous expenses totaled $4,320.
 Date Account Debit Credit
 June 6 Cash 300,000
 June 8 Prepaid rent 50,000
 Cash 50,000
 June 9 Equipment 100,000
 Cash 40,000
 Notes Payable 60,000
 June 10 Office Supplies25,000
 Accounts Payable 25,000
 June 16 Cash 39,400
 Service Revenue 39,400
 June 16 Accounts Payable25,000
 Cash 25,000
 June 20 Cash 43,700
 Accounts Receivable 20,200
 Service Revenue 63,900
 June 21 Wages Expense 23,500
 Cash 23,500
 June 21 Cash 20,200
 Accounts Receivable 20,200
 June 22 Cash 6,300
 Unearned Revenue 6,300
 June 27 Office Supplies 3,500
 Accounts Payable 3,500
 June 28 Electricity Expense 1,850
 Utilities Payable 1,850
 June 28 Telephone Expense 2,650
 Utilities Payable 2,650
 June 28 Miscellaneous Expense 4,320
 Cash 4,320
 This company was incorporated on March 1, 2013 with a starting of $1,500,000 and
10,000 common stock shares at $50 par value. These are the company’s
transactions for the first month:

 Date Transaction
 March 3 $300,000 were paid as advanced rent for six months.
 March 4 Office supplies were purchased on account totaling $35,000.
 March 6 Services were provided to customers, and the company received $54,000
in cash.
 March 7 The accounts payable for office supplies purchased on March 4 was paid.
 March 7 $200,000 in cash was used to purchase equipment costing $560,000. The
remaining $360,000 became a one year note payable with interest rate of 4%.
 March 9 Office supplies were purchased on account totaling $13,500.
 March 12 Services were provided to customers, and the company received
$43,500 in cash.
 March 13 The accounts payable for office supplies purchased on March 9 was
paid.
 March 14 Employees were paid wages for March 3-March 14 totaling $356,000.
 March 14 Services were provided to customers totaling $256,720.
Customers paid $143,650 with a promise to pay $113,070 remaining
balance in the future.
 March 20 Office supplies were purchased on account totaling $5,400.
 March 21 Customers paid $100,000 toward the $113,070 remaining
balance for services rendered March 14.
 March 23 The accounts payable for office supplies purchased on March
20 was paid.
 March 25 Customers paid $13,070 for services rendered March 14.
 March 27 Customers paid $23,000 in advance for services to be received.
 March 28 Employees were paid wages for the final weeks of March,
totaling $453,600.
 March 28 Electricity bill was received totaling $6,750.
 March 28 Phone bill was received totaling $8,754.
 March 31 Miscellaneous expenses for the month were totaled at $15,450.
 Date Account Debit Credit
 March 1 Cash 1,500,000
 Common Stock 500,000
 March 3 Prepaid Rent 300,000
 Cash 300,000
 March 4 Office Supplies 35,000
 Accounts Payable 35,000
 March 6 Cash 54,000
 Service Revenue 54,000
 March 7 Accounts Payable 35,000
 Cash 35,000
 March 7 Equipment 560,000
 Cash 200,000
 Notes Payable 360,000
 March 9 Office Supplies 13,500
 Accounts Payable 13,500
 March 12 Cash 43,500
 Services Revenue 43,500
 March 13 Accounts Payable13,500
 Cash 13,500
 March 14 Wages Expense 356,000
 Cash 356,000
 March 14 Cash 143,650
 Accounts Receivable 113,070
 Services Revenue 256,720
 March 20 Office Supplies5,400
 Accounts Payable 5,400
 March 21 Cash 100,000
 Accounts Receivable 100,000
 March 23 Accounts Payable 5,400
 Cash 5,400
 March 25 Cash 13,070
 Accounts Receivable 13,070
 March 27 Cash 23,000
 Unearned Revenue 23,000
 March 28 Wages Expense 453,600
 Cash 453,600
 March 28 Electricity Expense 6,750
 Utilities Payable 6,750
 March 28 Phone Expense 8,754
 Utilities Payable 8,754
 March 31 Miscellaneous Expense 15,450
 Cash 15,450
 This company was incorporated January 1, 2014. They started out with a cash value of $2,350,000,
and they have 25,000 stock at $200 par value. These are their transactions for the first month:

 Date Transaction
 January 2 Rent was paid in advance for a full year totaling $750,000.
 January 3 Equipment costing $830,000 was purchased. $310,000 was paid in cash, and the remaining
amount of $520,000 was a one year note payable with an interest rate of 4.6%.
 January 3 Office supplies were purchased on account totaling $340,000.
 January 4 Services were provided to customers, and the company received $570,000 in cash.
 January 5 Sales were made, and the company received $350,000 in cash.
 January 6 The accounts payable for office supplies purchased on January 3 was paid.
 January 7 Sales were made totaling $475,000. Customers paid $235,000 in cash and promised to pay
the remaining $240,000 in the future.
 January 8 Services were provided to customers totaling $654,000. Customers paid $300,000 in cash
and promised to pay the remaining $354,000 in the future.
 January 9 Office supplies were purchased on account totaling $115,000.
 January 10 Customers paid $25,000 for sales made on January 7 leaving a balance of $215,000.
 January 11 Employees were paid wages totaling $457,000 for the first two weeks of January 2014.
 January 12 The accounts payable for office supplies purchased on January 9
was paid.
 January 13 Customers paid $65,000 for services rendered on January 8
leaving a balance of $289,000.
 January 14 The company paid $35,000 to the note payable for equipment
purchased January 3 leaving a balance of $485,000.
 Janaury 15 Customers paid $53,000 for sales made on January 7 leaving a
balance of $162,000.
 January 16 Customers paid $43,000 for services rendered on January 8
leaving a balance of $246,000.
 January 17 Office supplies were purchased on account for $75,000.
 January 18 Customers paid $35,000 for services rendered on January 8
leaving a balance of $211,000.
 January 19 The company paid $75,000 for equipment purchased January 3
leaving a balance of $410,000.
 January 20 The accounts payable for office supplies purchased on January
17 was paid.
 January 21 Customers paid $100,000 for sales made on January 7 leaving a
balance of $62,000.
 January 22 Sales were made, and the company received $235,000 in cash.
 January 23 Customers paid $211,000 for services rendered on January 8.
 January 24 Customers paid $65,000 in advance for services to be rendered.
 January 25 Employees were paid wages totaling $545,000 for the third and fourth
weeks of January 2014.
 January 26 Customers paid $62,000 for sales made on January 7.
 January 27 Sales were made, and the company received $345,000 in cash.
 January 28 Office supplies were purchased on account totaling $215,000.
 January 29 The accounts payable for office supplies purchased on January 28
was paid.
 January 30 Services were provided to customers, and the company received
$765,000 in cash.
 January 31 Dividends were paid totaling $1,000,000.
 January 31 Electricity bill totaling $15,450 was received.
 January 31 Phone bill totaling $17,850 was received.
 January 31 Miscellaneous expenses for the month totaled to $650,000.
 Janaury 3 Equipment 830,000
 Notes Payable 520,000
 Cash 310,000
 January 3 Office Supplies 340,000
 Accounts Payable 340,000
 January 9 Office Supplies 115,000
 Accounts Payable 115,000
 January 17 Office Supplies 75,000
 Accounts Payable 75,000
 January 27 Office Supplies 215,000
 Accounts Payable 215,000
 Date Account Debit Credit
 January 7 Accounts Receivable 240,000
 Sales 240,000
 January 8 Accounts Receivable 354,000
 Service Revenue 354,000
 Date Account Debit Credit
 Janaury 2 Prepaid Rent 750,000
 Cash 750,000
 January 3 Equipment 310,000
 Cash 310,000
 January 6 Accounts Payable340,000
 Cash 340,000
 January 11 Wages Expense 457,000
 Cash 457,000
 January 12 Accounts Payable115,000
 Cash 115,000
 January 14 Notes Payable 35,000
 Cash 35,000
 January 19 Notes Payable 75,000
 Cash 75,000
 January 20 Accounts Payable 75,000
 Cash 75,000
 January 25 Wages Expense 545,000
 Cash 545,000
 January 29 Accounts Payable 215,000
 Cash 215,000
 January 31 Dividends 1,000,000
 Cash 1,000,000
 January 31 Utilities Payable – Electricity 15,450
 Cash 15,450
 January 31 Utilities Payable – Phone 17,850
 Cash 17,850
 January 31 Miscellaneous Expenses 650,000
 Cash 650,000
 January 4 Cash 570,000
 Service Revenue 570,000
 January 5 Cash 350,000
 Sales Revenue 350,000
 January 7 Cash 235,000
 Sales Revenue 235,000
 January 8 Cash 300,000
 Service Revenue 300,000
 January 10 Cash 25,000
 Accounts Receivable – Sales 25,000
 January 13 Cash 65,000
 Accounts Receivable – Service Revenue 65,000
 January 15 Cash 53,000
 Accounts Receivable – Sales 53,000
 January 16 Cash43,000
 Accounts Receivable – Service Revenue 43,000
 January 18 Cash35,000
 Accounts Receivable – Service Revenue 35,000
 January 21 Cash100,000
 Accounts Receivable – Sales 100,000
 January 22 Cash235,000
 Sales Revenue 235,000
 January 23 Cash211,000
 Accounts Receivable – Service Revenue 211,000
 January 24 Cash65,000
 Unearned Revenue 65,000
 January 26 Cash62,000
 Accounts Receivable – Sales 62,000
 January 27 Cash345,000
 Sales Revenue 345,000
 January 30 Cash765,000
 Service Revenue 765,000